At the closing bell, the Dow Jones Industrial Average was at 24,893.49, up 1.0 per cent.

The broad-based S&P 500 gained 1.3 per cent to end the session at 2,698.63, while the tech-rich Nasdaq Composite Index jumped 1.9 per cent to 7,143.62.

Sam Stovall, chief investment strategist at CFRA Research said the market remained brittle after the dramatic swings of the last 10 days, but the economic outlook remains broadly upbeat and not likely to see a recession anytime soon.

Wall Street opened the day on a downward trajectory after the consumer price index (CPI), which tracks the costs of household goods and services, was released, showing a 0.5 per cent increase in January, overshooting analyst expectations.

The Labor Department data was more eagerly anticipated than usual following last week's stock market turmoil when worries about the potential for more aggressive Federal Reserve interest rate hikes sparked a massive selloff.

While Treasury bond yields rose after the pricing data, the bounce in equities by midday suggested "stocks are comfortable with the idea that a little bit of inflation is a good thing," Briefing.com said.

"Rising inflation goes hand-in-hand with a growing economy (or that is at least the textbook view) and a growing economy should translate into good earnings growth."

Analysts said worries about the CPI report also were countered by disappointing retail sales data, showing an unexpected 0.3 per cent drop last month, which could weaken the case for more aggressive Fed tightening.

Higher bond yields boosted bank shares, with JPMorgan Chase, Goldman Sachs and Bank of America all winning more than two percent.

Technology shares were another strong segment, with Apple climbing 1.8 per cent, Amazon 2.6 per cent, Facebook 3.7 per cent and Netflix 3.0 per cent.